ALAN R. STONEMAN, PETITIONER V. UNITED STATES OF AMERICA
No. 89-118
In the Supreme Court of the United States
October Term, 1989
On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Third Circuit
Brief For The United States In Opposition
TABLE OF CONTENTS
Question Presented
Opinions Below
Jurisdiction
Statement
Argument
Conclusion
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 7a-21a) is reported
at 870 F.2d 102. The opinion of the district court (Pet. App. 1a-6a)
is unreported.
JURISDICTION
The judgment of the court of appeals was entered on March 13, 1989.
A petition for rehearing was denied on April 13, 1989 (Pet. App.
22a-23a). The petition for a writ of certiorari was filed on July 11,
1989. /1/ The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).
QUESTION PRESENTED
Whether petitioner is entitled to a writ of error coram nobis
vacating his conviction for conspiracy to commit mail fraud because
the jury instructions were erroneous under McNally v. United States,
483 U.S. 350 (1987), even though the indictment stated an offense and
the evidence at trial was sufficient to support the conviction.
STATEMENT
In 1985, petitioner was convicted of conspiracy to commit mail
fraud (18 U.S.C. 1341) and to violate the Travel Act (18 U.S.C. 1952),
in violation of 18 U.S.C. 371. He was sentenced to four months'
imprisonment and fined $10,000. The court of appeals affirmed his
conviction and this Court denied certiorari. United States v. Smith,
789 F.2d 196 (3d Cir.), cert. denied, 479 U.S. 1017 (1986). In 1987,
after this Court held in McNally v. United States, 483 U.S. 350
(1987), that the mail fraud statute did not apply to certain schemes
involving the deprivation of intangible rights, petitioner applied for
a writ of error coram nobis to vacate his conviction. The district
court denied the application (Pet. App. 1a-6a). The court of appeals
affirmed (Pet. App. 7a-21a).
The evidence at trial, which is summarized in the court of appeals'
opinion on direct appeal, showed that petitioner participated in a
scheme to bribe government officials so that they would award
contracts to a company he formed, CTA, Ltd. Petitioner's company
sought contracts to recover overpayments of FICA taxes on behalf of
state and local governments and their employees (see 789 F.2d at 198 &
n.1). It obtained a contract from Allegheny County, Pennsylvania,
because petitioner provided stock worth more than $30,000 and numerous
other personal benefits to Allegheny County officials. CTA also
obtained a $150,000 contract from the City of Pittsburgh, although
another company offered to do the job for $35,000. CTA obtained the
contract because petitioner gave more than $6,000 and valuable stock
options to the President of the Pittsburgh City Council. CTA
performed the contract by hiring the other bidder for $35,000.
Petitioner also attempted to obtain a contract from the Commonwealth
of Pennsylvania. Petitioner's co-defendant, William Smith, bribed
Robert Asher, a Republican Party official, in return for a contract
with the Commonwealth that would have generated $4 million in profits.
The scheme was discovered, the contract was cancelled, and another
company performed the work for $1.3 million. United States v. Smith,
789 F.2d at 198-199.
The indictment and jury instructions on the conspiracy to commit
mail fraud count were predicated on the theory that petitioner had
conspired to defraud the citizens of Pennsylvania of both intangible
and tangible rights. The scheme allegedly defrauded the citizenry of
its intangible right to honest and disinterested services by
government officials. The government also contended that petitioner
had defrauded the people of tangible savings that would have resulted
from impartially awarded contracts. At trial, petitioner did not
object to the government's reliance on the intangible rights theory.
Following this Court's decision in McNally, which held that the
mail fraud statute does not reach schemes to deprive citizens of the
intangible right to honest government, and after petitioner had
completed serving his sentence, he filed an application for a writ of
error coram nobis to vacate his conviction. The district court denied
relief. The court concluded, based on the evidence and the jury
instructions, that "the jury could not have convicted (petitioner) of
conspiracy to commit mail fraud without finding that an object of the
scheme to defraud was to deprive the citizens of Pennsylvania of
money." Pet. App. 6a.
The court of appeals affirmed. It concluded that "the indictment
alleges and the evidence introduced by the government shows that
(petitioner) schemed to defraud the Commonwealth of Pennsylvania by
securing no-bid FICA recovery contracts through the bribery of public
officials and did, in fact, cause a money loss to the Commonwealth
through such a scheme." Pet. App. 13a.
ARGUMENT
Petitioner contends (Pet. 5-9) that this Court should grant the
petition for a writ of certiorari to resolve the conflict among the
circuits concerning whether coram nobis relief is available to vacate
mail fraud convictions that were based in part on an intangible rights
theory.
In our brief acquiescing in the certiorari petition in Keane v.
United States, No. 88-1178, and in our petition for a writ of
certiorari in United States v. Mandel, No. 88-1759, we urged the Court
to resolve the conflict on this issue. This Court, however, denied
certiorari in both cases. United States v. Keane, 852 F.2d 199 (7th
Cir. 1988), cert. denied, 109 S. Ct. 2109 (1989); United States v.
Mandel, 862 F.2d 1067 (4th Cir. 1988), cert. denied, 109 S. Ct. 3190
(1989). Nothing has occurred since the Court denied certiorari in
those cases that would make review in this case more appropriate.
(The court of appeals' decision in this case was cited in the
submissions in Keane.)
In any event, petitioner is clearly not entitled to coram nobis
relief. In United States v. Morgan, 346 U.S. 502 (1954), this Court
stated that not all errors, but only those "'of the most fundamental
character,'" warrant coram nobis relief. Id. at 512 (quoting United
States v. Mayer, 235 U.S. 55, 69 (1914)). The defect in the jury
instructions here did not amount to fundamental error since
petitioner's scheme clearly contemplated a loss to Pennsylvania of
property within the meaning of McNally. The courts below determined
that the indictment, the proof, and the jury instructions focused on
monetary loss. As noted by the court of appeals: "(T)he loss of
money was implicit in the intangible rights scheme. * * * (The court)
is unable to hypothesize a set of circumstances under which the jury
could have found (petitioner) guilty of depriving the citizens of the
Commonwealth of Pennsylvania of their right to honest government (an
impermissible intangible right under McNally) without also having
found that (petitioner) was involved in a scheme the sole purpose of
which was to insure that a company known as CTA obtained a no-bid FICA
recovery contract at a substantially greater cost to the Commonwealth
of Pennsylvania than a contract obtained through traditional
competitive bidding." Pet. App. 8a-9a. Thus, this case is quite
unlike McNally, where the Court stressed that Kentucky, the alleged
victim of the scheme, had lost no money (483 U.S. at 360). /2/
Moreover, this Court recently denied the petitions of
co-conspirators Smith and Asher, each of whom raised McNally
challenges to their convictions. United States v. Asher, 854 F.2d
1483 (3d Cir. 1988), cert. denied, 109 S. Ct. 836 (1989); United
States v. Smith, 865 F.2d 253 (3d Cir. 1988) (Table), cert. denied,
109 S. Ct. 1936 (1989). Asher, who was tried separately from Smith
and petitioner, raised his McNally challenge to his conviction on
direct appeal. Smith attacked his conviction on McNally grounds by a
collateral attack on his conviction under 28 U.S.C. 2255. The court
of appeals rejected their contentions, holding in each case, as it did
in this case, that their scheme contemplated a loss of money by the
victims. Because Asher was not entitled to reversal of his conviction
on direct appeal and Smith was not entitled to reversal of his
conviction under Section 2255, it follows that petitioner is not
entitled to coram nobis relief. /3/
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
KENNETH W. STARR
Solicitor General
EDWARD S. G. DENNIS, JR.
Assistant Attorney General
THOMAS E. BOOTH
Attorney
SEPTEMBER 1989
/1/ The petition is untimely because it was not filed within 60
days after the entry of the judgment of the court of appeals, as
required by Sup. Ct. R. 20.1 in criminal cases. It is clear that this
is a criminal case, rather than a civil case, because petitioner seeks
a writ of error coram nobis, and the writ has been abolished in civil
cases by Fed. R. Civ. P. 60(b). In United States v. Morgan, 346 U.S.
502, 505 n.4 (1954), where the Court held that the writ remains
available in criminal cases, the Court noted that a motion for a writ
of error coram nobis "is a step in the criminal case and not, like
habeas corpus where relief is sought in a separate case and record,
the beginning of a separate civil proceeding."
/2/ Other courts of appeals have likewise concluded that kickback
schemes usually involve property loss within the meaning of McNally by
inflating the victim's costs. United States v. Perholtz, 842 F.2d 343
(D.C. Cir.), cert. denied, 109 S. Ct. 65 (1988); United States v.
Richerson, 833 F.2d 1147 (5th Cir. 1987). That question is of no
prospective importance, in any event, in light of the amendment of the
mail fraud statute to overturn McNally. Anti-Drug Abuse Act of 1988,
Pub. L. No. 100-690, Section 7603, 102 Stat. 4508; see 134 Cong. Rec.
S17,376 (daily ed. Nov. 10, 1988).
/3/ Contrary to petitioner's contention (Pet. 11-12), the court of
appeals correctly examined the record to determine whether petitioner
was prejudiced by the inclusion of intangible rights language in the
jury instructions. See generally United States v. Hasting, 461 U.S.
499, 509-512 (1982). Furthermore, the court properly relied on its
decision affirming petitioner's conviction on direct appeal (see Pet.
App. 14a) in concluding that petitioner's scheme deprived Pennsylvania
of money.